CONSUMER confidence in house prices dropped to its lowest level in four years last month, according to new figures.

Just 45% of homeowners believed their property would continue to increase in value, down from 52% in September, the Woolwich Consumer Confidence Index showed.

Andy Gray, head of mortgages at Barclays and The Woolwich, said: "With confidence levels at the lowest for four years, the decision to hold rates came as no surprise following the slowdown in the housing market and lower growth in borrowing."

"We expect confidence to soften further as interest rates are set to peak at 5% in early 2005."

Confidence fell most in Yorkshire and the South East, by 12% to 47% and 41% respectively, making the South East the least confident region in the country.

By contrast the South West was the most confident region with 54% of homeowners believing that their property would continue to increase in value over the next 12 months.